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Foster Corporation established Kline Company as a wholly owned subsidiary
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Foster Corporation established Kline Company as a wholly owned subsidiary. Foster reported the following balance sheet amounts immediately before and after it transferred assets and accounts payable to Kline Company in exchange for 4,900 shares of $12 par value common stock: |
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Amount Reported |
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Before Transfer |
After Transfer |
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Assets |
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Cash |
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$ |
46,000 |
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$ |
23,000 |
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Accounts Receivable |
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83,000 |
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38,000 |
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Inventory |
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32,000 |
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13,000 |
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Investment in Kline Company |
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111,000 |
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Land |
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23,000 |
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20,000 |
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Depreciable Assets |
$ |
195,000 |
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$ |
108,000 |
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Accumulated Depreciation |
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93,000 |
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102,000 |
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46,000 |
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62,000 |
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Total Assets |
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$ |
286,000 |
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$ |
267,000 |
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Liabilities and Equities |
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Accounts Payable |
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$ |
33,000 |
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$ |
14,000 |
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Bonds Payable |
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77,000 |
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77,000 |
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Common Stock |
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53,000 |
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53,000 |
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Retained Earnings |
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123,000 |
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123,000 |
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Total Liabilities and Equities |
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$ |
286,000 |
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$ |
267,000 |
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Required: |
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a.&b. |
Prepare the journal entry that Foster recorded when it transferred the assets to Kline, and the entry that Kline recorded for the receipt of assets and issuance of common stock to Foster. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
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Record the transfer of assets and accounts payable by Foster Corporation to Kline Company.
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